The following is a post created by Phyllis Rockower in 2016 but is still relevant. Her son, attorney, and real estate investor, William Bronchick, is continuing her blog as per her wishes and continue to educate real estate investors.
When you are dealing with a seller and taking over the property subject to the existing loan, you are going to transfer the property to a trust, with you as trustee.
So in order to get the bank to talk to you, you have to get a signed authorization to release information from the seller
Then you call the bank and tell them that you are the trustee and that you have this form and ask where to fax it. Some lenders require their own form so make sure you have them fax or email it to you. They also may ask you info that is NOT on the form so make sure you have that ready. (sellers last 4 digits SS#, etc.)
When they verify that they have it, they will normally talk to you.
It’s important to get all these questions answered the first time because it is hard to reach these people and you may get a run around with lots of others.
Here is the script:
“I am the trustee for this property and am working with the owner to try to resolve this problem so you don’t have another foreclosure on your books. I think we can get some of the family members to help but I need to verify some information.”
1. Tell me about the interest rate. Is it fixed? For how long?
2. What is the exact amount of arrears? Do you require all of it upfront?
3. Would you consider moving some of the back payments to the end of the loan? Could we work out a payment plan? Has he/she ever done that before?
4. What about a loan modification? Is this possible? Has she/he tried to do that with you?
5. What is the exact loan balance?
6. Are taxes and insurance escrowed?
7. Are you willing to do a short sale just in case we are unable to raise all of the money you require?
8. What’s the best way to reach you in the future? Can I have your direct line or email?
Want more specific info?